Gold Star spouses ask Congress for relief from 'widow's tax'

Jul. 17, 2013 - 05:31PM
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Rep. Joe Wilson, R-S.C., is greeted July 17 by Carolyn Gaddis, left, and Patricia Bergquist before he addresses a breakfast sponsored by the Military Officer's Association of America before a Storming the Hill event at the Rayburn House Office Building in Washington, D.C. Wilson is the primary sponsor on H.R. 32 to repeal the SBP/DIC offset. (Mike Morones/Staff)

Nearly 100 Gold Star widows and their advocates converged on Capitol Hill on Wednesday to urge Congress to repeal a law that forces about 61,000 widows and widowers to forfeit part of their benefits.

The offset is also sometimes called the “widow’s tax.” In involves payments under the Defense Department’s Survivor Benefit Plan and the Veterans Affairs Department’s Dependency and Indemnity Compensation program.

The SBP requires retirees to pay premiums. When they die, DoD then pays annuities to their survivors, up to 55 percent of what the retiree received in retirement pay. Based on a 2001 change in law, survivors of active-duty service members who die after Sept. 11, 2001, are eligible for SBP, based on the service member’s years of service.

Dependency and Indemnity Compensation is paid to survivors of service members who die while on active duty, and survivors of retirees who later die of service-connected deaths.

By law, when the widow or widower is entitled to both of those payments, the SBP payment is reduced by the amount of DIC, which is currently $1,215 a month.

That means widow Amanda Cook gets no SBP at all. The DIC payment of $1,215 a month offsets the entire amount of what her SBP would have been, around $1,000 a month.

“Our husbands gave the ultimate sacrifice, and we’re the ones having to pay for it. We have to live with that hole in our hearts and our stomachs every single day of our lives. To continuously add more insult onto injury is not right,” said Cook, whose husband, Marine Corps Sgt. Trevor Cook, died in July 2011 in a training accident after they had been married just seven weeks.

She’s attending school using VA education benefits. School costs that are not covered come out of the benefits she receives. “Whatever doesn’t cover it, I have to pay out of my pocket, which comes from savings or from [benefits], and I need that to pay for rent. I’m not working right now because I’m trying to finish my education.”

She joined other widows in visiting lawmakers’ offices to urge them to support legislation introduced in the House and Senate that would eliminate the offset.

“The offset to me, sadly, is a lack of appreciation for the commitment of all the families here,” said Rep. Joe Wilson, R-S.C., chairman of the House Armed Services Committee’s military personnel panel, speaking at the gathering of widows, advocates, and members of lawmakers’ staffs.

As of July 16, Wilson said, 144 members had agreed to co-sponsor the bill.

In this time of budget austerity, it’s not clear where the money would come from to fund repeal of the offset, estimated to cost $433 million in 2014 and $6.3 billion over the next 10 years. Similar proposals have failed in Congress in past years, even when budgets were more flush with cash.

But Phil Odom of the Military Officers Association of America said the widows should be a priority, and it’s up to lawmakers and staffers to find a way.

“Over and over, people say this can’t be done. It can be done. You’ve already done it,” Wilson told the group, noting that past efforts have resulted in some relief, including an extra $90 a month being paid to widows to alleviate part of the offset. Those payments will be gradually increased to $310 in 2017, when they will stop unless legislation is passed to continue that effort.

Wilson noted that he has heard testimony about health care costs eating the defense budget alive, but “we found out that wasn’t necessarily true,” he said, noting that defense officials asked to reprogram excess money from their health care accounts in each of the last two years, including $709 million this year.